Norway’s Statoil has awarded Kvaerner the contract for complete upgrade of the Njord A platform. The contract has an estimated value of around NOK 5 billion ($588 million).
“This is one of the most important contracts in the market this year. We are proud of the confidence Statoil is showing us by awarding Kvaerner the contract to upgrade Njord A for future decades of production”, says Jan Arve Haugan, President & CEO of Kvaerner.
Kvaerner has pointed out that, after a few years of adaptions, the Norwegian oil- and gas industry has started to demonstrate “considerable cost reductions combined with increased productivity.”
The CEO believes the award is a result of a higher degree of cooperation between the oil companies and suppliers for improvements.
“We notice that the efforts to strengthen competitiveness are yielding results. Costs have been substantially reduced, which in turn has contributed to make investments decisions like this possible. This is gratifying not only for the license partners and Kvaerner, but for an entire industry working hard to ensure that the oil and gas sector continues to contribute to value creation, and at the same focusing attention on health, safety and environment,” says Haugan.
“The Njord partners have reached a very important milestone in the work to upgrade the Njord A platform for further production. I am very pleased that we today can sign the contract with Kvaerner at Stord. The work represents considerable ripple effects nationally and regionally”, says Senior Vice President for Project Development in Statoil, Torger Rød.
The new contract was initiated when Statoil and Kvaerner 1 April 2016 signed a framework agreement for upgrading of the platform. The frame agreement is based on a project execution plan where Statoil, on behalf of the license partners, has an option to call-off the execution of further phases. Kvaerner has since signing of the frame agreement been awarded options for front-end engineering and design (FEED), yard stay at Kvaerner’s Stord yard and a so-called pre-EPC phase with a total value of NOK 500 million.
With today’s award, Statoil declares the main option in the agreement from April last year. The contract includes a complete upgrade of hull and topside, a project enabling Njord to produce oil and gas in decades to come.
Njord Future, which is the name of the project, is pioneering work in the sense that this is a production platform on the Norwegian Continental Shelf taken ashore for upgrading after being in operation since 1997, Kvaerner said.
The project will comprise around 3 000 man-years, mainly in Kvaerner and Aker Solutions, subcontractor responsible for engineering. The main project activities will take place at Kvaerner at Stord and Aker Solutions in Bergen. Aker Solutions’ share of the work is valued at about NOK 1 billion.
“This is the largest offshore platform in Norway to have been brought to shore for a total upgrade,” said Luis Araujo, chief executive officer of Aker Solutions. “We’re excited to continue our work with Kvaerner and Statoil on this landmark project, which will enable the Njord field to keep producing oil and gas for several more decades.”
“We expect a very high percentage of Norwegian value creation in the project, probably more than 95 percent. With exception of some procurement, this is likely to be a complete Norwegian project, with high activity in Hordaland and other parts of Western Norway which have been hit by the downturn in the oil industry over the last years,” says Haugan.
The Njord platform is scheduled to be delivered in the spring of 2020. Kvaerner also has an option for the offshore hook-up when Njord A is back on the field.
Njord A was originally delivered in September 1997. The topside was fabricated at what today is Kvaerner at Stord, while the hull was fabricated at today’s Kvaerner in Verdal.